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FiveStarLaw, Attorney

Category: Bankruptcy Law

Satisfied Customers: 36668

Experience: Bankruptcy Lawyer. Experienced.

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Our general partnership has filed a chapter 11 voluntary (single

Customer Question

Our general partnership has filed a chapter 11 voluntary (single asset)... and has a signed employment contract with the representing attorney for over one month. The attorney is now insisting on a new employment contract with a personal guaranty .. but nothing has changed. Does the debtor have to agree to a new employment agreement with a personal guaranty ? Can the attorney request the court to be removed from the case if the debtor does not agree with a new employment agreement?

In a bankruptcy case, an attorney must have court permission to terminate representation of the debtor. Typically a judge will not allow an attorney to terminate the relationship without good cause.

Based only on your post, it appears that the attorney would not be entitled to a new employment contract. Absent a clause in the contract requiring a personal guarantee, you appear to have no obligation to give such a guarantee.

I hope that the information which I provided was helpful to you.

Best wishes for a successful outcome. If you have additional questions, please do not hesitate to submit them to me directly.

Thank you, FLAandNYLAWYER

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THIS IS FOR INFORMATION ONLY.NO ATTORNEY-CLIENT RELATIONSHIP EXISTS.PLEASE CONSULT A LAWYER IN YOUR STATE FOR LEGAL ADVICE

Thank you for your response. I want to make sure that I have covered everything. The signed employment contract was signed on September 9th and did not include a personal guaranty clause.

In the signed employment contract it states:

7. In the event the Firm seeks payment from the bankruptcy estate, the Firm intends to apply to this Court for compensation in conformity with Bankuptcy Code 328, 330 and 331 and understands that its compensation will be subject to the approval of the Court.

7. The new employment contract which the attorney is insisting on states:

In the event the Firm seeks payment from the bankruptcy estate, the Firm intends to apply to this Court .....etc. same. PLUS:

8. The Firm will obtain a guaranty of its fees from Debtor's general partner, and also from its principals, (collectively "Guarantors"). On their own behalf and with regard to the entities they control, the Guarantors have waived conflicts and have been advised that the Firm's representation in this case will be limited to Debtor in its capacity as Debtor and Debtor in Possession, and that the Firm will not represent the Guarantors personally in this case. The Firm does not represent the Guarantors in any other matters. Certain of the Guarantors have guaranteed approximately three loans secured by assets of the Debtor's. This arrangement has been fully disclosed to the Debtor and the Guarantors and the Debtor expressly consents to the arrangement. The Guarantors have been advised to retain independent counsel legal counsel and understand that the Firm's duty of undivided lozalty is owed exclusively to the Debtor.

**Then a Personal Guaranty is attached to this employment contract.

This attorney has been handling the case since the filing on July 20th. I signed the first employment contract and faxed it back (with a fax completed transmission statement copy) ... how do I check to see if he has filed that with the court?

This chapter 11 case is in california (riverside county). Would your response still be applicable?

With all this extra knowledge, is it still your opinion that the attorney cannot ask to be removed from the case or that the court will not approve his stepping away from the case? Thank you for your help with this.

That is a lot of additional info however my answer is substantially unchanged.

how do I check to see if he has filed that with the court?

The retainer should have been filed with your petition. You can go to the bankruptcy court and ask the clerk of the court for your bankruptcy file. You would then be able to review the entire file and see whether the retainer was properly filed.

This chapter 11 case is in california (riverside county). Would your response still be applicable?

Yes, I was aware of the state.

With all this extra knowledge, is it still your opinion that the attorney cannot ask to be removed from the case or that the court will not approve his stepping away from the case?

The attorney can ask to be removed but typically the court would not approve his withdrawal on the basis his desire to change his fee agreement midway through his representation of you.

I hope that the information which I provided was helpful to you.

Best wishes for a successful outcome. If you have additional questions, please do not hesitate to submit them to me directly.

Thank you, FLAandNYLAWYER

Please clickACCEPTso that I can get credit for my work

Bonus and Positive Feedbackgratefully accepted!

THIS IS FOR INFORMATION ONLY. NO ATTORNEY-CLIENT RELATIONSHIP EXISTS. PLEASE CONSULT A LAWYER IN YOUR STATE FOR LEGAL ADVICE

Thank you so much for your review of the situation. I understand everything more clearly due to your assistance. I will check with the court and review the bankruptcy file...thank you for giving me the correct direction.

We have a status hearing on Tuesday (Oct 14) and the auction for the single asset real estate is on the 17th. If the attorney should put before the court on that Tuesday to be removed from the case, what would be your suggestion as to how I should address the court (or should I at all) ... and if I should address the court to object to his request to be removed, how would you recommend that I handle that situation in the court?

You have been so incredibly helpful .. thank you so much. At least I feel like I finally have some guidance and understanding ... and not being dragged over the table ...

If you would be so kind to answer the above last two questions, I would greatly appreciate it. As soon as I receive your response, I will click the accept ... as you have been more than helpful and reassuring.

We have a status hearing on Tuesday (Oct 14) and the auction for the single asset real estate is on the 17th. If the attorney should put before the court on that Tuesday to be removed from the case, what would be your suggestion as to how I should address the court (or should I at all) ... and if I should address the court to object to his request to be removed, how would you recommend that I handle that situation in the court?

You can consider objecting to his withdrawal based upon the signed retainer agreement.

I will tell you that...the things you have to go through to be an Expert are quite rigorous.

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